Introduction to Home Mortgages

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Introduction to Home Mortgages
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Outline

• Process to purchase a home
• Pre-approval
• Programs
• What do Lenders look for?
• What should you look for?

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Pre-Approval

• Realtors and sellers usually require a
  pre-approval letter when you put an offer down on
  a home.
• Application
• Pull credit report
• Learn maximum loan amount approved for
• Know payment
• Good Faith Estimate (GFE)
• No Cost for pre-approval

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Programs

• 1st time Homebuyer Programs
• 95 loan to value
• 97 loan to value
• 100 loan to value
• 103 loan to value
• Interest rates for 1st time Homebuyers vs rates
  for previous purchase homebuyers.

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What Do LENDERS Look For In Customers?

• Credit
• Credit established
• 680 credit score
• Can build non traditional credit
• Debt to Income Ratio
• DTI between 38 and 55
• Gross income
• Student loans

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Example

• Income 60,000 a year 5,000 a month
• Current monthly debt
• Student loans 150 pmt
• Credit cards 100 pmt
• Car loan 250 pmt
• How much do I qualify for?
• 500 current debt per month
• 45 DTI 2,250 minus current debt
• Approximately 1,750 a month

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What Should YOU Look For In A Mortgage?

• Interest Rate
• Fixed Rate / Variable Rate
• Pre-Payment Penalty
• Closing Costs
• Local Representative

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• www.wellsfargo.com/mortgage